Lufthansa Technik and GMR Group to set up MRO facility

Hyderabad: Lufthansa Technik AG, a leading global provider of maintenance, repair and overhaul (MRO) facilities for planes, components and engines, will set up an MRO facility in the city along with a leading domestic infrastructure company, Hyderabad-basecd GMR Group.

The facility will be located at the upcoming Hyderabad international airport, being developed by the GMR Group at Shamshabad, on the city outskirts. The airport is scheduled to launch commercial operations from March 2008.

According to August W. Henningsen, chairman of the executive board of Lufthansa Technik, the company will invest Rs1 billion ($20 million) in the facility, which will comprise of a two-bay hangar and state-of-the-art workshops. The facility will be the first of its kind in India.

The facility will provide base maintenance services for narrow-body aircraft such as the Airbus A320 family and Boeing 737 aircraft, including 737 Classic and 737 NG.

According to Henningsen, Lufthansa Technik will be the majority stakeholder in the company, holding more than 75 per cent of its equity share capital, while GMR will hold the remaining equity. Financial details, however, are yet to be confirmed.

Construction of the 20,000 sq metre facility will begin this year and it is expected to commence operations by the end of 2008. The two-bay hangars will serve as parallel maintenance facilities for the rapidly growing narrow-body fleet of Indian carriers.

Though the facility will be focused on the Indian aviation industry, as a member of Lufthansa Technik's existing worldwide MRO market, it will also serve customers from other countries. Currently, airplanes are being hauled to the Middle East or other locations in Asia for MRO support.

Lufthansa Technik is in talks with other airlines, such as Indian, as potential customers. Its existing customers include Jet Airways and Air Sahara, currently merged, and Kingfisher. According to Henningsen, with more than 400 airplanes on order, the Indian aviation market is one of the fastest growing in the world.

Lufthansa Technik, a part of the Lufthansa Aviation Group, has an annual turnover of $5 billion from the MRO business. Other major business segments of the Lufthansa Group also maintain a presence in India, with Lufthansa Airlines already operating 70 flights a week to-and-from India.